A worker passes a floating production, storage and offloading (FPSO) vessel modified and upgraded by Keppel Shipyard for Malaysia-based Bumi Armada in their shipyard in Singapore in this February 8, 2014 file photo. Singapore rig builder Keppel Corp Ltd took a S$230 million writedown in the fourth quarter on Sete Brasil-related orders, dragging its quarterly profit down by 44 percent and pushing its full-year profit to the lowest level since 2010. REUTERS/Edgar Su/Files
KUALA LUMPUR: Bumi Armada
, which provides offshore and marine energy services, plans to seek compensation for what it sees as Woodside Energy Julimar Pty Ltd’s unlawful termination of a charter contract involving a floating production storage and offloading (FPSO) unit.
The company told Bursa Malaysia that it had received received a notice of termination from the Australia-based company to terminate the contract for the charter of the Armada Claire FPSO unit.
The vessel has been operating in the Balnaves Field, off northwestern Australia, since delivering first oil in August 2014.
“Bumi Armada’s position is that the purported notice of termination is not valid, and in fact tantamount to a cancellation for convenience or alternatively, is a repudiation of the contract by Woodside, pursuant to which Bumi Armada is entitled to compensation from Woodside,” it said.
“The company intends to fully enforce its rights under the contract, including initiating legal proceedings against Woodside for its unlawful purported termination of the contract.”
Bumi Armada, whose major shareholders include the Employees Provident Fund Board (8.74%) and Amanah Saham Bumiputera Scheme (7.64%), said the contract’s termination was expected to impact the full year 2016 financial results of the group.
The extent of the impact could not be determined at this time, as it would depend on the outcome of its legal action against Woodside, the company added.
For the financial year ended Dec 31, 2015, Bumi Armada posted an unaudited net loss of RM241.78mil.
To recap, Bumi Armada signed a RM1.46bil contract with Apache Energy Ltd in September 2011 - less than three months after it was listed on Bursa Malaysia - for an initial four-year fixed-term charter with an option for four annual extensions.
In 2014 Texas-based Apache sold Australian unit Apache Julimar Pty Ltd, which has a 65% working interest in the WA-49-L block that includes the Balnaves field development, to Australia-listed Woodside Petroleum Ltd.
Armada Claire (a modified and upgraded FPSO formerly named Armada Prima) has been designed with a disconnectable riser turret mooring system for cyclonic weather in 135m water depth. Bumi Armada owns this technology which allows it to work in cyclone and hurricane-prone areas like South-East Asia, Australia, India and Gulf of Mexico.
Bumi Armada shares gained 1.5 sen to close at RM1.00 on Friday, with 8.647 million shares changing hands.
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